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The U.S. and Taiwan clinched a trade deal on Thursday that cuts tariffs on many of the semiconductor powerhouse's exports, directs new investments in the U.S. technology industry and risks infuriating China. - REUTERS
Transcript
00:00The U.S. and Taiwan clinched a trade deal on Thursday that cuts tariffs on many of the tech powerhouses' exports.
00:08Under the deal, Taiwanese shipmakers like TSMC, which are expanding U.S. production,
00:13will be charged a lower tariff on semiconductors or related equipment that they ship to the country.
00:19They will also be allowed to import some duty-free.
00:22Broad tariffs that apply to most other Taiwanese exports to the U.S. will fall from 20% to 15%.
00:30The U.S. Commerce Department said generic pharmaceuticals, aircraft components, and
00:36unavailable natural resources would face a 0% tariff.
00:41Taiwan said the U.S. also promised that it would be treated no worse than anyone else
00:46should ship tariffs be increased later.
00:48In exchange, Taiwanese companies will invest $250 billion in semiconductors,
00:54energy, and artificial intelligence in the U.S.
00:58That includes $100 billion already committed by TSMC in 2025, with more to come,
01:04according to Commerce Secretary Howard Lutnick.
01:07The Trump administration said Taiwan would also guarantee an additional $250 billion in credit
01:13to facilitate further investment.
01:15At a press conference, Vice Premier Chang Li-chun said Taiwan aimed to be a strategic AI partner
01:21for the U.S.
01:23In this round of negotiations, we also promoted two-way high-tech investment between Taiwan
01:28and the United States.
01:29We hope that in the future, both sides can become close strategic partners in AI.
01:33So aside from the previously mentioned Taiwan model for expanding investment in the U.S.,
01:38the U.S. side also committed through this investment MOU to establishing a mechanism for two-way investment
01:43to expand investment in Taiwan.
01:46The deal deepens the Trump administration's ties with Taipei.
01:50It comes at a critical time as China ratchets up pressure on the island, which it views as a
01:55renegade province, and while Washington works to avoid an all-out trade war with Beijing.
02:01Shares in TSMC rose 3% to record highs on Friday, further boosted by forecast-smashing earnings
02:08the day before.
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